The impact of merger and acquisition announcements on the US utility industry

Abstract

The purpose of this paper is to determine the relationship between mergers and acquisitions (M&A) and the post-acquisition performance of US utility firms to make a reasonable conclusion as to whether the market reaction to M&A’ s is good or bad. 21 acquiring firms on the New York Stock Exchange in 2010 and 25 acquiring firms in 2011 are randomly chosen for this study. The Market model and Cumulative Abnormal Return (CAR) will be used in this paper. This study is trying to answer the question: can M&A create or destroy value for US utility firms?